CANADA STOCKS-TSX hits 1-wk high as Nexen jumps on deal approval

Reuters Staff

4 Min Read

* TSX rises 70.88 points, or 0.58 percent, at 12,230.47
* All 10 main sectors advance
* Nexen up 13.8 percent, Progress gains 13.4 percent
* MEG, Canadian Oil Sands, Athabasca decline
By John Tilak
TORONTO, Dec 10 (Reuters) - Toronto's main stock index hit a
one-week high on Monday, led by a rally in Nexen Inc
and Progress Energy Resources Corp, after Canada
approved foreign bids for both energy companies while also
imposing limits on takeovers in the sector.
Nexen shares jumped 13.8 percent to C$26.77 after Ottawa
approved a $15.1 billion bid from CNOOC Ltd, China's
third-largest oil company. Progress Energy, whose $5.3 billion
takeover by Malaysian state-owned energy company Petronas was
also approved, surged 13.4 percent to C$21.96.
Gains in those two stocks and the broader energy sector
outweighed the impact of new restrictions on some investments in
the oil sands sector that hurt shares of some smaller players.
The Conservative government said on Friday it would block
virtually all new attempts by foreign state-owned enterprises to
buy assets in the sector.
"It was a well-crafted decision. Overall people are
satisfied. The primary concern here revolves around the fact
that state-owned enterprises are, unlike free-market companies,
competing with an unfair advantage," said Michael Sprung,
president of Sprung Investment Management.
The Toronto Stock Exchange's S&P/TSX composite index
ended up 70.88 points, or 0.58 percent, at 12,230.47.
Earlier in the session the index touched 12,236.71, its highest
point since Dec. 3.
All 10 main sectors on the index ended higher, with the
energy sector up 0.9 percent and materials gaining 1 percent.
NO 'FOR SALE' SIGN IN CANADA
"There is no 'for sale' sign up in Canada. We are open for
business, but not in all sectors are we willing to sell out
ourselves to somebody offshore," said Fred Ketchen, director of
equity trading at Scotia McLeod.
"Investors will be far more cautious of takeover talk. It
removes some of the speculation of takeover chatter within the
market, especially when they're involving foreign-based
companies," he added.
Shares of some companies active in the oil sands sector
declined over concerns about more limited investment.
Suncor Energy Inc, Canada's largest energy company
and a dominant oil sands producer, fell 0.6 percent to C$32.04
and played the biggest role of any single stock in weighing on
the market.
Smaller oil sands players were also hit. MEG Energy Corp
was down 3.1 percent at C$33.65. Canadian Oil Sands Ltd
fell 1.1 percent to C$19.78 and Athabasca Oil Corp
lost 2.4 percent to C$10.00.
"People are worried about the capital that's going to be
available in the oil industry. Certainly there has been a ring
drawn around the oil sands," Sprung said. Investors might view
smaller oil sands companies as being shut out from foreign
takeovers at a premium price, he added.
On Monday, the chief executive of Canadian Oil Sands said
the new rules will be healthy for the industry.
Miners were boosted by higher commodity prices.
Barrick Gold Corp rose 1.5 percent to C$33.77,
Silver Wheaton Corp gained 2.1 percent to C$36.15 and
Teck Resources Ltd advanced 2.1 percent to C$35.33.
Both gold and silver prices were up about 0.5 percent.